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Apple China Shuffles Management Amid Slow iPod Sales

By Staff MacNewsWorld ECT News Network
Aug 24, 2005 9:15 AM PT

According to reports from Chinese media outlets, Apple has launched a significant personnel reshuffle among the management of its China operations.

Apple China Shuffles Management Amid Slow iPod Sales

On Monday, Li Bin, general manager of Apple's business in China, resigned from his position a mere three months after he took the post. Meanwhile, the company has dismissed the vice president of the Asia Pacific Region and director of the distribution department as well as a raft of managers in eastern China, southern China and western China.

A company statement said, executives reponsible for the Asia-Pacific region will now report directly to Apple Global Vice President John Brandon as of last Friday.

Hoping Switch Will Improve Chances

The moves were described by analysts and anonymous sources as part of Apple's effort to accelerate the company's expansion in the country.

Kang Zhiyong will take the post of general manager for Apple China. An executive with Apple China said that Kang had previously worked for Apple in a different position, but would not go into details.

Industry analysts indicated that it's likely the shake-up was mainly due to the "dead-alive" state of the iPod in China. While the stylish music-player has been selling like hotcakes in Europe and the U.S., pushing Apple's stock price from US$15.60 a year ago up to $47, sales in China have been positively stagnant.

According to government-run media outlets, many consider the $100 iPod shuffle and $240 iPod mini too expensive for most Chinese consumers to buy, especially in the face of fierce competition from local MP3 brands.

An Apple product vendor in Zhongguancun, Beijing, said that China's MP3 player market is almost bursting at the seams, as more and more brands spring up. Since early this year, many big MP3 names have produced micro-hard-disk players -- cheaper than the iPod -- to compete head-to-head with Apple.

According to reports in Chinese media outlets, besides the iPod, sales of other Apple products have also gone from bad to worse in China, even though the company has set up many exclusive stores in major cities such as Beijing, Shanghai, and Guangzhou.

Not Yet Breaking Into Mainstream

Most agents and distributors pointed out that Apple positions its products for high-end users, explaining the perceived high cost. Furthermore, the company has so far kept a low profile in China, releasing relatively few promotions and advertisements in the market.

Apple has 12 resellers of iPod products in China. Revenue from the company's business in China account for less than 1 percent of the company's total global sales.

Reports indicate that the biggest challenge for Apple's new general manager will be to reinforce its distribution channel in China. The company recently changed its the general agent for iPod mini in north China. It was the second time that Apple Computer altered the general agent in the area since the launch of iPod mini in China.

On May 24, Apple Computer appointed Li Bin the general manager for its China operations. Previously, Li Bin had been deputy general manager of IBM PC division China region.


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